Planning and Budgeting

Like salt and pepper, planning and budgeting go together. A NACUBO workshop explored the companion processes.

New Tools Deliver Essential Metrics

More than a dozen sessions addressed integrated planning, financial modeling, performance measurement, and other strategies for ensuring an institution’s viability.

Measuring Faculty Productivity

Brown University’s James W. Patti and Eduardo J. Lorente have created a faculty productivity measurement system, Project AIR: Academic Impact Reporting, for the Division of Biology and Medicine.

Aware that they were working in a culture where “nothing was measured” and faculty were highly concerned about any efforts to measure their productivity, the administrators to date have shared their data only with deans and department heads, Patti said.

The Brown program sought to provide aggregate objective metrics on individual faculty productivity, crunch the numbers to provide a standardized scoring model to facilitate intradepartmental comparisons of faculty contributions, and stimulate discussion about valued behaviors and how faculty performance should be measured and rewarded.

Patti and Lorente emphasized that the metrics excluded intangible items such as television appearances, honors and awards, and university committee service.

Creating the most audience buzz was the dollar density ratio, which measures the research dollars spent and recovered per square foot of assigned lab space. This calculation has resulted in some changes in lab space assignments, Lorente said.

To date, linkages to the compensation process have been informal. “The reports tend to affirm, or in rare cases refute, the dean’s judgments about a faculty member’s performance and guide how that person is broadly rewarded in the system,” Patti concluded.

Financial Modeling Tech Tool

Amelia Koch no longer has to say, “I’ll get back to you,” when trustees ask what implications a 5-percent tuition increase would have on the financials at Berklee College of Music, Boston. Koch, vice president for finance, now uses a modeling program called Future Perfect (http://www.pfm.com/) to calculate the financial impact of numerous variables on the college’s bottom line. She demonstrated the software during the session “Using Financial Modeling Tools to Track Compliance With Debt Covenants.”

With enrollment growing and space tight on the urban campus, Koch has been working with facilities staff to acquire funds to pay for expansion. “Last summer,” she said, “we went out with a $175,000 bond issue. We negotiated two covenants with the knowledge that our overall debt can be no more than two times our unrestricted operating assets.”

Koch explained that the modeling program could calculate the percentage of debt, which trustees then could see onscreen. (Koch takes staff to trustees meetings to enter figures into the software and show the results while she explains what is being calculated.) If there is interest in swapping some debt with capital campaign proceeds, for example, those figures are entered and the program calculates the implications.

“Doing this kind of exercise lets trustees immediately see the consequences of what they might decide,” said Koch. “They have a lot of confidence in the projections and can then consider their risk tolerance for a particular scenario.”